Select Committee on Treasury Minutes of Evidence


Examination of Witnesses (Questions 280 - 284)

TUESDAY 23 APRIL 2002

MR GUS O'DONNELL, MR NICHOLAS MACPHERSON, MR NICHOLAS HOLGATE, MR ALEX GIBBS AND MR JOHN KINGMAN

  280. The Audit Commission is not going to be around until 2004.
  (Mr Macpherson) Absolutely. At the moment we have the CHI and we also have the Audit Commission. We will certainly encourage them to continue to work very diligently in the meantime to get the sort of data which we need to hold people to account.

  281. How can we be kept informed of the progress in spending this money?
  (Mr Macpherson) I think you will be kept informed both through the work of the National Audit Office, through the Audit Commission and the Commission for Health Improvement.

  282. I do not mean in three years' time, I mean in three months' time.
  (Mr Macpherson) Regular figures will be produced. The Department of Health produce regular reports. The Chief Executive, Nigel Crisp, only a month ago produced a very useful document setting out how the Health Department was doing against its targets.

Mr Fallon

  283. Can I ask the reverse of Mr Beard's question. If you are devolving all this money to primary care trusts and giving more freedom to three star trusts and strategic health authorities and so on to incentivise people, how do you stop this money leaking out into higher awards for management and performance bonuses and more salaries all round for senior managers? I can see how you control the bulk of staff through the review bodies but how can you ensure (the great public fear) that this does not go into more bureaucracy locally? How do you ensure that does not happen?
  (Mr Macpherson) I think, as I say, in terms of local level, the strategic health authorities are going to play a key role but ultimately what matters is whether these trusts deliver their targets. Certainly we are not against incentivising managers so long as the incentives are tightly drawn, and rigorous. If those public sector managers are then incentivised to really deliver, sort out things like waiting times, it is perfectly reasonable to pay them a decent performance bonus, but if not, not. One of the very clear things with this star system is if you are a useless trust manager you will get found out very quickly and in many cases you will be lucky if you hang on to your job. It is a far more dynamic system.

Chairman

  284. That is a big departure. Mr Beard made the point of being kept informed regularly. He was thinking of every three months or so but is there an opportunity to keep us informed on a quarterly basis?
  (Mr Macpherson) At the moment my understanding is that the Department of Health will report on progress in its annual report both in the spring and as we move to the new resource accounting system in the autumn as well, which is at least twice a year. In addition, as with Nigel Crisp's report last month, my guess is there will be further opportunities to hold Alan Milburn and Nigel Crisp to account on progress.

  Chairman: If you could bear our comments in mind and perhaps report back what you find. That was very interesting, we thank you for your attendance this morning. I am sorry we did not come on to productivity, Mr Kingman, but we will get the chance to engage in that subject tomorrow by asking the Chancellor direct on productivity without your intervention. Thank you very much.




 
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